Pressure building on TMC head

COLD SHOULDER: Existing memory firms have viewed the company as a competitor for government aid, creating a discouraging turn of events for TMC chief John Hsuan

By Lisa Wang and Jerry Lin / STAFF REPORTER

John Hsuan (宣明智), head of state-controlled Taiwan Memory Co (TMC,台灣記憶體公司), said he was discouraged by skepticism about TMC’s role in helping the nation’s computer memory industry, a sign that the government’s efforts to overhaul the industry may be stalled.

“He said he was upset and discouraged by public opinion and he did not know what to do,” Hsuan’s secretary Jolie Chiu told the Taipei Times by telephone yesterday.

The remark came after speculation circulated that Hsuan, honorary vice chairman of United Microelectronics Corp (聯電), had tendered his resignation to the Ministry of Economic Affairs (MOEA), which last month picked the semiconductor heavyweight to lead TMC.

“Hsuan has no comment on this speculation,” Chiu said.

MOEA yesterday denied speculation that Hsuan may resign.

“I have not heard from Hsuan that he intended to resign,” Minister of Economic Affairs Yiin Chii-ming (尹啟銘) told reporters, adding that he would meet with Hsuan today.

Yiin said he wished to explain to Hsuan that restructuring the local DRAM sector was not an easy task.

“The most important thing is for Hsuan to do his best to help build TMC and prove to everyone that this [TMC] is beneficial to the industry,” he said.

“This thing [TMC] is good for both the industry and the public and I think this is what really matters,” Yiin said, adding that he urged Hsuan not to take criticism too seriously.

On April 1, Hsuan said TMC had selected Japan’s Elpida Memory Inc as a technology partner and planned to request NT$30 billion in capital from Taiwan’s government to develop new technologies, before outsourcing production to local firms.

RIVALS

But the establishment of TMC came as a shock to existing memory chipmakers including Powerchip Semiconductor Corp (力晶半導體), which had hoped to obtain financial support from the government rather than gain another rival.

Nanya Technology Corp (南亞科技) and its US partner Micron Technology Inc also gave a cold shoulder to TMC’s partnership invitation and requested the government to give it equal support.

Asked whether TMC would be able to continue, Yiin voiced confidence that TMC would not fail.

“TMC is in good shape,” Yiin said. “Especially the fact that Hsuan has been able to negotiate a good deal with Elpida within such a short period of time; I think this is already a good beginning.”

Yiin said the government would not scrap TMC, as the goal of TMC was to help the DRAM industry build up key technologies.

“This is for the sake of the industry’s long-term development and not just to meet short-term needs to cope with the downturn,” Yiin said. “The TMC project will not change as a result of external influences.”

Yiin refused to say whether he would persuade Hsuan to stay if he tendered his resignation, saying he did not want to answer hypothetical questions.

Yiin said he believed Hsuan was only expressing his feeling of disappointment toward irrational criticism and malicious attacks. However, Yiin was confident that Hsuan would carry on after their talks today.

SHARE PRICES

Because of the news, shares of Powerchip fell 6.15 percent to NT$8.39, Nanya dropped 2.22 percent to NT$6.18, and Winbond Electronics Corp (華邦電子) fell by its 7 percent daily limit to NT$6.91 yesterday.

Separately, Powerchip said it had hired Citigroup Global Markets Ltd to handle the payment of US$158 million in overseas convertible bonds due on June 17, a company filing to the Taiwan Stock Exchange showed.